Cutting Back on Holiday Spending; "Made in America" Labels and Toy Safety; Who You Should Tip This Time of Year

Aired November 25, 2007 - 15:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(NEWSBREAK) VELSHI: Welcome to YOUR MONEY, where we look at how the news of the week affects your wallet. I'm Ali Velshi.

ROMANS: I'm Christine Romans. Coming up on today's program, want to buy so much stuff at holiday time that you don't really need it.

VELSHI: I'm guilty of that.

Plus, those made in America labels and what it says about toy safety.

ROMANS: And later dog walker, yes, postman, no. Find out who you should tip at this time of the year.

VELSHI: Well between the credit squeeze, the soft housing market, price of gas and you may be cutting back on your holiday spending this year. And if that is the case then a couple of recent reports say that you're not alone, 35 percent of the shoppers surveyed by the Consumer Federation of America say they planned to spend less in 2007 than they did last year. That's up from 32 percent last year. The biggest purchasing drop in the survey's eight-year history.

ROMANS: Just over 30 percent of shoppers in an America's research group report expect to back off on how much money they spend. What's more, the same organization says that nearly 50 percent of the people it surveyed half have higher credit card balances than a year ago.

VELSHI: Now, keeping your holiday debt under control starts before you opened your wallet by planning ahead and prioritizing your spending in advance. Carmen Wong Ulrich is the author of "Generation Debt and a finance columnist for men's health." Carmine good to see you again.

VELSHI: A couple of questions. It might be past the point that people can worry about this now, but what are some things people should worry about now before the holidays about how to spend their money?

ULRICH: Keep it cash as much as possible. If you can learn anything from this year to next year is prepare as much as you can. Part of that is making a list of everyone. You know, I don't want to use the word budget, but list, like Santa's list. How much you'll spend on each person and keep it to that budget. Gifts are half of the expenses of the holidays. Think about decoration, travel, gas, entertainment, and all those things including ...

ROMANS: Food.

ULRICH: Food and even charity. The average amount that people spend on themselves during the holidays is $99. If the average budget is $800, that's a big chunk that maybe you can take yourself off.

ROMANS: You pick something up for grandma, you see something nice for yourself. A point you make that is very important. Somebody that loves you and cares about you doesn't want you to go into credit card debt to buy them a gift. That's something we should remember. There is a lot of pressure on gift giving but no one wants you to be in financial trouble because you had to give them a gift.

ULRICH: Right, exactly. So really keep that in mind. And communicate with your family. If you're in dire straits and you just really need to cut down this year, make it a kids' holiday and you have lots of nieces and nephews. And you say to the adults you know what the kids are going to get the gifts this year.

ROMANS: That is what we are doing this year. Even my siblings, we would exchange a name so we didn't have to buy everybody a gift and now we're not even doing that. We're exchanging gifts among the children. And it makes it all that much more fun.

VELSHI: You were talking about using cash. Here is the thing, we sort of had conflicting information over the course of the last year if you take out x number of dollars and spend it, you're done. But if you put it on a credit card, you have a statement of it, you have a record of it, you have possibly better guarantees on the products that you buy, particularly if they're toys and you find out they need to be recalled.

ULRICH: Exactly.

VELSHI: Is there an argument of using credit cards?

ULRICH: Being able to spend what you can afford and saying the word cash, OK, that's what you have on hand. If you keep that in mind. If you use credit cards, which even I do, as well, it is a great way, like you said, it keep a tally of how much you're spending. Use one card. Make sure it's the one with the lowest interest rate and also if you can get rewards on that card, that's great. Make sure you can pay it off as soon as possible; you know 30 percent of shoppers are not going to be able to pay off their credit card debt for a year.

ROMANS: Carmen you say avoid signing up for retail credit cards, why?

ULRICH: Yes, because they are the vein of the credit card world. The interest rates are so high, we're talking about in the 20s and any discount they give you up front whether it's 10, 20 percent, no interest for a year, and it is worth nothing if you can't pay it off in full.

VELSHI: Both of you would sign up for the 15 percent off if you take the department store credit card. I'm the danger, 15 percent off and I never have to pay.

ROMANS: You're the one they want.

VELSHI: All this advice is really different if you happen to be really good at paying your bills.

ULRICH: I'm guilty as charged, I've done it before. Now it's considered an inconvenience in terms of paperwork and keeping up. If you can be a real accountant with your credit card bills and if you can pay it off, especially the ones that say no interest over the year. If you can pay it off on time, it's a winner for you. If you are not able to, stay away from those cards.

ROMANS: Bottom line, keep it simple. It doesn't have to be elaborate. Keep a list. Maybe the "a" list and "b" list. Sorry to say, but maybe somebody just focus on close family and friends and move on from there.

VELSHI: Or be a bit of a hermit and just not know people.

ULRICH: No, don't be a Scrooge.

VELSHI: Good to see you.

ULRICH: Thanks for having me.

VELSHI: Thank you being with us, Carmen Wong Ulrich is the author of "Generation Debt."

ROMANS: All right. Up next on YOUR MONEY what's driving you to spend your hard-earned cash on all that stuff you don't need.

(COMMERCIAL BREAK)

SUSAN LISOVICZ, CNN CORRESPONDENT: I'm Susan Lisovicz at the New York Stock Exchange. Wall Street is bracing for a possible drop in sales this holiday season with a mixed bag of results from retailers. The National Retail Federation is forecasting a 4 percent sales gain for the hottest holiday shopping months, November and December. But that's a smallest projected increase since 2002.

It's delivered against a backdrop of higher gas prices and a soft housing market and lower profit outlooks last week from J.C. Penny and Starbucks. Some of the standout results from retailers, Target disappointing. The long-standing Wall Street favorite reporting a decline in quarterly profits and the countries number two discounter also missed forecasts as sales on high-end goods went soft.

The up upscale Nordstrom chain skyrocketed it 22 percent but cut its outlook. Saks saw it's quarterly more than triple.

I'm Susan Lisovicz. Now back to YOUR MONEY. ROMANS: You know it's the season of giving and a lot of what we're giving is stuff that the recipients, I'm sure they'd love to get it and it's wrapped very nicely, but they don't really need to get it. You don't have to get stressed out and you don't have to max out your credit cards in the quest for a perfect gift.

VELSHI: In fact our next guest thinks it is time to quit spending on what is unnecessary for the sake of ourselves, our credit and our planet. Lisa Wise is the executive director for the non-profit Center for a New American Dream which works to help Americans consume responsibly. That's what you call the rolling the rock up the hill, Lisa. What on earth could we possibly hear now because whatever you have to say we have advertisers on the other side bombarding people with reasons on why they need to keep spending?

LISA WISE, CTR. FOR A NEW AMERICAN DREAM: Right. Americans are being bombarded with marketing messages and I think it's up to us to say enough is enough and to really set our own priorities as consumers. Particularly hard during this time of year to slow things down but I'll actually going to invite all of you to think about what the holidays are all about. It is really about joy, it is about spending time with your family and it is about quality of life.

Earlier segment we were talking about how to manage your debt. What if you managed to not spend as much in the first place? I think that is a good start for people to start when they think about consuming less overall.

ROMANS: Well it is so interesting that you talk about consuming less. Because during the whole toy industry scandal, I was asking toy industry executives, well, maybe parents just don't need to buy all these toys for their kids. They were, frankly, aghast. They said, no, this is the American way. We should be able to have what we want for our children and children should be able to have all of these things. Is there a rule that we should think about? Some people in my family only give three gifts.

WISE: I think setting boundaries is a great way to start. Americans have been super sizing their consumption since the 1950s and, frankly, from our perspective and after some polling nine out of ten Americans are ready to downsize their holidays and be less materialistic but we have to find some creative and really fun ways of doing that. We don't want to deprive people the pleasure of actually being able to exchanging gifts. Because I think that's the joy of the holidays.

I think what's important right now is to set those boundaries and find some creative, fun, traditional ways of being with your family that is not about adding more stuff to your lifestyle and things that are going to be obsolete in a couple months anyway. Pick a number of gifts that you can exchange, set a spending limit, and decide that everything you are going to exchange is eco friendly, enjoy regifting. Dozens and dozens of ways for us to be really creative.

ROMANS: I always give Ali's gifts to somebody else when I get them. VELSHI: I have no issues with regifting. I think it's a great idea. The other thing Lisa that you touch on, I am talking about when you talk about consumption, we don't pull back on consumption very much for our cars when gas is over $3 a gallon. We don't see all of America rushing towards small cars and there is a very specific example of where we can save. This isn't a matter of bad habit, its psychology.

WISE: Right it is. I think we need to ask ourselves, you know, where can we have more of what matters? I mean, people are in the throws of such busy lifestyles. We're so stressed and I think everybody would argue that part of that stress comes from feeling like we need to have more and more stuff all the time. We think about the investment of time and time at work to surround ourselves with these things that really at the end of the day don't mean that much. I think the exchange is a higher quality of life for people. Slowing down a little bit, enjoying what matters, spending time with your family, those things come with a much higher reward without the same kind of costs.

VELSHI: Lisa, your information is all good, I'm sort of in awe because it's one of those; wow people can change those habits. Lisa, thank you for being with us. Lisa Wise is the executive director of the New American Dream.

Well coming up after the break, the hidden costs that can come with gift cards. You thought this was just a freebie; watch out, it might cost you something. We'll tell you exactly what gift cards are about when we come back.

(COMMERCIAL BREAK)

VELSHI: One way to reduce holiday stress is to let friends and family pick out their own gifts and giving gift cards instead of presents takes the guess work out of the holidays and people end up getting things they really want. I think it's not a bad idea, this trend towards gift cards.

ROMANS: I know, but there are some people who are a little more old-fashioned and they say just give them a check and how personal is giving a check.

VELSHI: But now they box up those gift cards and make it look like a present.

ROMANS: If they ever redeem those gift cards it's a gift that they really want. One study reports that get this, $8 billion worth of gift cards went unused last year. That's about $26 for each person in the United States. Tod Marks is with "Consumer Reports." Todd, that means that people essentially are not picking up their gift. They're giving free money to the retailers or the stores.

VELSHI: Put in their drawer and just sits there.

ROMANS: Why aren't people cashing them in? TOD MARKS, "CONSUMER REPORTS:" Well, it really comes down to four basic reasons. People told us in a national survey that we did that, one; they didn't have the time to use them. Two, they couldn't find anything they wanted. Three, they lost them. Four, they forgot about them and there was a fifth, they just expired. So, a lot of things that conspire against the consumer. We always tell people if you give a gift card or use a gift card, use it immediately.

VELSHI: I can't help too many people with the lost and forget. I'm one of these people, but the expired thing. I have a real position about the fact that I don't know they should expire. Do most of them expire? Is it an assumption when you get one that it should expire?

MARKS: "Consumer Reports" believes that cards should not come with any fees or expiration dates. A couple classes of cards that are much more apt to have fees and those are the cards issued by bank or credit card companies, like an American Express-type gift card. Along with cards that are sold by shopping centers, what they call mall cards that are good for any store within a particular shopping center, those are the ones that are most likely to have onerous things like activation fees, transaction fees, dormancy fees, which means that the card actually lose value when you don't use them and expiration dates in which they can ultimately become useless if you don't use them within a given time frame.

ROMANS: Yet, the growth of gift card giving is just incredible. Why are people giving them? What is the advantage of giving them?

MARKS: Well, actually, some estimates point gift card growth projected to be at about $100 billion by 2008, so, you're right. Their sales are skyrocketing. And it's -- they're not, they're a popular gift because they're a perfect no must, no fuss way to shop for the finicky person on your list.

VELSHI: Fantastic last-minute gifts and merchants have played up this whole idea of making them feel more like gift then the last minute thing by the way they merchandise them.

MARKS: Well it is the same thing like CDs, you put something in a nice box with great packaging and it says I love you in a subtle, but classy way. Something that cash just simply can't do.

ROMANS: That's true. I know you're not an etiquette expert, although I'm sure you use the right fork at dinner, but a lot of people in the etiquette world are still wondering if a gift card is not a gift.

VELSHI: They're old-fashioned.

ROMANS: That is old-fashioned, but especially if somebody doesn't use it.

VELSHI: That makes sense. What do you think?

MARKS: Well I will tell you, if you don't use it, you lose it and we tell people because gift cards are great. Give somebody a gift card to a book store, a restaurant, a hotel. Those are great. Those are the cards that tend to not have any of those ugly fees attached and they don't generally expire. And the other thing, if you don't use it right away, be sure to use it quickly and make sure you buy it for the -- spend the amount of money that is inherent in the card itself because one of the great things about cards for retailers is they spur loyalty, get you into the store and once in the store you tend to buy things that are more expensive.

So, if you give somebody a $25 gift card to say a Borders or a Barnes & Noble, that's great, you can get a book, but go to a Best Buy and give with a $25 gift card you're going it end up spending $100 or more out of your own pocket.

VELSHI: Tod, great conversation, thank you for being with us.

MARKS: My pleasure.

VELSHI: Tod Marks from "Consumer Reports."

ROMANS: Ali is not going to get me a gift card this year.

VELSHI: I'm clear on that. That's good for all the other folks I don't know what to get them. I'll get them gift cards.

ROMANS: I'll regift your gift card right away.

Up ahead, safe toys and how to shop for them and American toy makers take on whether made in the USA is any guarantee against trouble.

(COMMERCIAL BREAK)

VELSHI: Twenty six million toys have been recalled so far this year. The vast majority of them manufactured in China and that's causing jitters for many consumers this holiday season.

ROMANS: Some concerned shoppers are coming home to products made in the USA. "AMERICAN MORNING's" Greg Hunter is here with more. Most of the toys are made in China, some in other countries, but some toys still made here.

GREG HUNTER, CNN CORRESPONDENT: Yes that is sad, but true. The Federal Trade Commission says that in order to tag an item made in the USA all or virtually all that must be made right here in the United States. Does that made in the USA label actually help when it comes to sales?

Here's one company that says, most definitely.

(BEGIN VIDEOTAPE)

HUNTER (voice over): The assembly line is running 24/7 at this Little Tikes toy plant in Hudson, Ohio. Churning out its most popular toy, the cozy coupe or what Little Tikes executive Vice President Tom Prichard calls ...

TOM PRICHARD, EVP, LITTLE TIKES: One of the best selling cars in America that's made in America.

HUNTER: Instead of in China, where 80 percent of toys sold in the United States are made.

PRICHARD: We have some of the best people right here in Hudson, Ohio, who know how to make the product and they're experts at doing it.

HUNTER: Workers here earn between $15 and $25 an hour, far most than most of their Asian counterparts. Still, the company says those higher wages pay off by creating a product with unique appeal. With $600 million in sales expected this year, Little Tikes is trumpeting the made in USA.

PRICHARD: Made in America, with Little Tikes means safety, quality, it means durability. Hopefully it means a trust that mom understands it's safe.

DENNIS DUNLOP, CEO, AMERICAN MARKETING ASSN: Consumers right now, in particular, equate quality with made in America.

HUNTER: Other popular toys like Slinkies and Crayola Crayons are also still made in the U.S. Consumer advocates say while U.S.-made products are more likely to comply with regulations than toys made abroad ...

RACHEL WEINTRAUB, CONSUMER FEDERATION OF AMERICA: A made in USA label does not equal a safety certification.

HUNTER: Weintraub wants the government to test all toys, regardless of where they're made. Instead of relying on the companies to do so. Little Tikes conducts its own safety test beginning with design. All products are created in wood or foam and then put to the test. This slide set started out a little shaky so they added on a foot. Little Tikes is adding this label, made in the USA.

PRICHARD: It helps moms find the product they're looking for in here.

(END VIDEOTAPE)

HUNTER: Little Tikes does make some of its toys overseas, but says the majority, nearly 70 percent are made right there in Hudson, Ohio, and they don't have plans to change any time soon. As for some other toys, Crayola mostly made right here in Pennsylvania, right here in the USA and another favorite we found, another toy, kind of nasty, but always fun to blow bubbles. Yes, made in the USA and it was tough to go out and find these toys because 80 percent of toys are made in China alone. You know, China gets a bad rep, but these are American manufacturers over in China.

ROMANS: Tell me why this CEO of Little Tikes decided to keep the bulk of his production here? Most CEOs say they simply don't have a choice.

HUNTER: They have a good relationship with their labor, they get it. I don't know if you saw that, but to extrude that plastic car, for example, that cozy coupe that sells 300,000 a year, a huge commitment in terms of resources, and also there is a skill to put these together and they're afraid, according to the number two guy who will probably be CEO some day, probably, or is in line for it, anyway, but the number two guy there, Tom Pritchard says, you know, it's a big gamble.

You take your operation to China, you don't know what kind of a product or how long it will take you to get that quality back and they make, according to them a top-quality car. They say, hey, listen, we're not the cheapest, we think we're the best.

VELSHI: Good story, thanks, Greg.

ROMANS: All right. So not ready for a personal China toy cut just yet? Well, we're here to tell you exactly how to make sure that whatever you buy from wherever in the world is safe.

VELSHI: Alan Korn is the director of public policy for Safe Kids Worldwide and his point is sometimes it's stuff from China sometimes it's stuff from right here in the United States. Alan, what do you do to make sure you're doing the right things for your kids this holiday season?

ALAN KORN, PUBLIC POLICY FOR SASFE KIDS WORLDWIDWE: Well, there has been so much news out there. It's almost been like the perfect storm over the past two, three months. Every single day there has been a toy recall. You know, the good news is notwithstanding that news and notwithstanding all the recalls we had, toys in this country are wildly safe. Children ...

VELSHI: Wildly safe?

KORN: Yeah, they really are.

ROMANS: Wow. I don't know about my Thomas the Tank Engines, Alan, you're going to have to sell me.

KORN: One of those Thomas Tank Engines I have in my own home, too.

ROMANS: Was that a wildly a safe toy that sold millions and millions of copies?

KORN: This one was not. This one had lead on it and it's not good and parents need to know whether or not they have these type of products in their home to get them out. Given the number of toys in the marketplace, there's not that many that are dangerous, but that does not mean you throw caution to the wind.

Whenever you've got iconic brands like Thomas the Tank Engine, Barbie, Dora the Explorer, you know a lot of units out there and you really need to be vigilant about getting these things out of the home, off the shelves and out of the day care centers.

VELSHI: All right. You have got some very specific points for people to remember if they're still buying their toys for this holiday season. Shop at a reputable dealer, stay away from second-hand shops, we're going to put some second hand shops out of business with this but sign up for these CPSCP recall alerts, the Consumer Product Safety Commission because it's very hard to track when you're buying gifts whether it's going to be recalled.

KORN: That's right. One of the biggest problems is people don't know whether or not there have been a recall or not. They won't catch the news program in the morning or in the evening or on CNN, they'll miss the recall notice and one of the best ways is if you go to the CPSCP Web site, which is www.cpsc.gov, you can click on for a recall alert.

That way when and if there is a recall, and there's going to be more, you're going to get a direct notification about whether or not the toy, about the toy that's been recalled and then there's a picture, nice identifying marks, you can check your home or day care to make sure it's not there. Get it out if it is.

ROMANS: Let's talk about picking age-appropriate toys for your child. Because this is important. Because it is also important for parents to remember that if you have a five-year-old and you have an 18-month-old, you're going to have to assume that that 18-month-old has access to those five-year-old's toys. So you have got to be careful about that. Tell us about how to be sure about the parts aren't too small, how to make sure you don't have choking hazards in your toy box.

KORN: A very good point. In fact, about 20 kids die each year from toy-caused injury. Of those 20, the vast majority are choking or aspiration. And one of the thing the parents can do this is a small parts tester. A little bit difficult to see but it's a little tube with a scientifically determined opening on the end of it.

And if there's any toy component that you buy that fits fully inside this the small parts tester, then you know that toy is not for the 18-month-old that you were referring to. This is a toy for children 3 and up. I've had children and young children, he's 7 now, but when he was two years old he put absolutely everything in his mouth. And I mean everything. Including small parts, which could be choking hazards.

ROMANS: Ands we're going through that now. Something my pediatrician recommends, toilet paper roll, empty, put two fingers over it, take it to the store with you. And if there is something that can slide through two fingers and a toilet paper roll, it is too small. For any child under three or four if you really want to be cautious.

KORN: And keep those toys separated. You are absolutely right. You don't have to go out and buy a small parts tester. The inside of a toilet paper roll, which is a little larger than this, but pretty good. If it fits inside there, not for children under three. Separate those toys when buying the toys. You'll see a lot of toys, by law have to have to have a label on the front of it. It's kind of small but you'll see it right there at point of purchase that warns the parent that this toy has small parts and not for children under three.

So you were talking before about toy selection at the point of purchase, at the retail store, preferably a reputable one. You take a look for this label and then you know head to another aisle, another section, there is plenty of choices in this country for purchases.

ROMANS: Alan, I am going to jump in there because I want to really warn parents about the labels, Ali, because a congressional panel has some done investigation and found that there are Chinese manufacturers that have been just slapping labels on with no, you know, the brand will say this has to be appropriate for ages three and up. So, the manufacturer will slap on appropriate for ages three and up with no kind of correlation to actually being appropriate. So parent should be cautious.

VELSHI: Use some common sense and use these tests that Alan is talking about.

ROMANS: Outside a reputable retailer, be very careful about things like that.

KORN: Yeah. Absolutely.

VELSHI: Alan, good to talk to you. Thank you for being with us.

KORN: Sure, our pleasure.

VELSHI: Alan Korn is the director of public policy for Safe Kids Worldwide.

Well, coming up, why your holiday buying ought to start with a spending plan and not a shopping list.

Also, we're going to figure out who deserves a tip at this time of year. And how much you ought to give them. Stay with us on YOUR MONEY.

(COMMERCIAL BREAK)

VELSHI: The holidays can be extra tough on couples, both emotionally and financially. But you can ramp down the anxiety from the beginning by figuring out how much you can afford to spend before you spend it. Did I say that like I believed it?

ROMANS: Well, I don't know if we believe it. Michelle Singletary has some other thoughts on keeping holiday money craziness under control when you're in a relationship. She's the author of "Your Money and Your Man." I love this title. "How You and Prince Charming Can Spend Well and Live Rich." Oh, please, Michelle, tell us how to spend well, live rich and not get in any kind of money squabbles over the holidays. MICHELLE SINGLETARY, "WASHINGTON POST": You know, it really begins with communicating and setting ground rules. It is amazing to me how couples will adhere to all kinds of rules on the workplace, driving, but when it comes to their relationship and how they spend money, it's like the wild, wild west. You spend what you want, I spend what I want and let's forget about it until the bills come in January and then we're going to be arguing.

ROMANS: Well, Michelle, let's be honest. It's his crazy family that is the problem here. They expect all these gifts. They want plane tickets. They've got mother in laws. They got all these high expectations. I mean, come on, it's very clear to me.

SINGLETARY: Exactly right. I had this show on XM Radio and this guy called in, Mark, who has this very fine tastes, champagne tastes and his wife just likes beer and she wants to shop at Target or Kohl's for him and he was complaining that he wanted pricy gifts. And I said same thing with the family. I said listen, you have to remember the reason for the season and not tie everything to what you get, including saying no to those family members who are going to put pressure you to buy things that you can't afford.

VELSHI: The problem with this, Michelle, is this interview we're doing with you was taped in 1987. It's the same story every year. We're just like - Christine and I are not here. We're on vacation. Nothing changes. Give me something that people can actually do that addresses this. What do we say?

ROMANS: Besides switching your spouse. We don't recommend that.

VELSHI: Right. Other than switching spouses. Which we've done a few times since 1987.

SINGLETARY: You've got time now before the rush of the holiday, before the pressure, before you start putting up all the decorations to sit down at the kitchen table, turn the TV off after you watch this program, sit down at the kitchen table and write up a budget first. People do the list first and that's how they overspend. Write down how much you can truly afford.

And here's a way you can do that. Pull out all your bills, your mortgage bill, your card notes, the student loan debt, the credit card, put them on the table as a reminder of why you can't overspend, as an incentive.

Get the newspaper and look at how the foreclosures are. Get the business section and look at all the lead stories and then maybe that will temper your temptation to overspend.

ROMANS: Well, you know, you have got to remember, and this will be my own marriage pop psychology. You've got to remember that you're a team. You're the team and you're together and then together you should have a game plan for handling both families. I mean, it shouldn't be something that drives you apart.

SINGLETARY: That's exactly right. I think so many couples are pulled apart by what their family expects and sisters and siblings and even the children. You have to be a team. There is no, you know, we. It's I -- it's us, I mean. When you are married, it has to be about the both of you. It's not about you anymore. My husband and I, we are so tight when it comes to Christmas. One Christmas we spent exactly $100 for the entire -- for everything, kids and relatives and that was a unified force. Because we just wanted to get rid of all that shopping and that business and we weren't focusing on the holidays. There were some relatives that didn't talk to us till Easter, but we didn't care.

VELSHI: But you didn't have to buy anything for them next year.

SINGLETARY: That's what I'm talking about. And we were -- it was a unified front and we decided it and he didn't go behind me and go yeah, that Michelle, she is so cheap. I wanted to buy you something.

ROMANS: We have something in our family we've been trying to push on the little kids and some of the moms and dads aren't going for us, you tell the little kids, listen, Jesus got three gifts, so you're going to get three gifts. You should see the look on their faces.

SINGLETARY: It is horrified.

ROMANS: It is mutiny, absolutely mutiny.

SINGLETARY: That's right. I was at a presentation at my church and I said I dare you, parents, to tell your kids they weren't going to get anything because they already have so much. And I said some of you wouldn't close your eyes that night.

But you know, here's another tip for parents, particularly couples who have got children. Go into your kid's room or wherever you keep all their toys and clean the room or the toy area and when you do that, you will be ashamed at how much they already have and how you're now going to add on to that and often times debt.

VELSHI: I think that makes sense, Michelle, because it's very hard for people to change their habits and change their thinking and talk about how much they have until you actually take stock of it. I do that in my own life. Do I really need another one of these things? Only because I see that I buy them and they sit around.

SINGLETARY: That's right. If you have little ones, ones that are not quite aware of things, and I did this for many years with my little ones, take the top layer of toys off, get the toys from underneath they haven't played with in God knows how long, wrap those up and put those under the tree. They'll never know the difference.

VELSHI: That is the ultimate regift.

ROMANS: And Michelle, in my case, all my child wants is a box and the paper on it anyway. I can put oven mitts, I can put anything in there.

SINGLETARY: That's exactly right. Yup. Exactly right. ROMANS: Michelle Singletary, "Your Money And Your Man, How You and Prince Charming Can Spend Well and Live Rich."

VELSHI: Just get that as a gift.

SINGLETARY: It's a great gift.

ROMANS: Thanks, Michelle. Thanks a lot.

Coming up next on YOUR MONEY, we'll help you solve one of your toughest problems for this time of year, figuring out who to tip and how much to give.

(COMMERCIAL BREAK)

ROMANS: Every year, the same questions drive us nuts some holiday time, it has nothing to do with relatives, who to tip, how much to tip, when is cash appropriate, how much cash is appropriate, you feel like you have got $20 bills falling out of your pockets.

VELSHI: And I'm waiting for the book and I may actually write it about - that actually everybody tips too much but couldn't find that one this season.

So we booked Stacie Krajchir, she is the co-author of "The Itty Bitty Guide to Tipping."

ROMANS: She wrote the book, you can't write the book.

VELSHI: She write the book and she is here to tell us about tipping. Stacie, thank you for being with us.

STACIE KRAJCHIR, "THE ITTY BITTY GUIDE TO TIPPING": Thanks so much. How are you doing.

VELSHI: This is totally one of those confusing things for Christine and me and pretty much everybody I run into about how many people you actually need to tip around Christmas. What have you got in here, what can you tell us?

KRAJCHIR: You know, the bottom line is I think that we wrote the book to try to demystify the whole craziness of tipping. And I think during the holiday season, before you start doling out the dollars, and figuring out who to tip and how much, I think take a deep breath and ask yourself who are my team players? And that's kind of everybody who helps simplify your life during the whole year. So it could be your nanny, your dog walker, if you're out of town a lot, your house sitter.

So people you see regularly and who help offer you a service pretty regularly.

ROMANS: Let me ask you about the babysitter, the nanny in particular, because more and more women working, more households have to have a nanny to sort of keep the two incomes going. How much do you tip a nanny? KRAJCHIR: You know, generally it's one to two weeks pay. Depending. Is she a live-in nanny or is she just a nanny that comes in during the day? So generally one to two weeks pay as well as a small gift for your child is appropriate.

And obviously you know your nanny pretty well, you're kind of giving your prized possessions for her to watch over. So pay attention to your nanny and her likes and dislikes and you can also get her that small gift that is about her and what she likes.

ROMANS: If you love your nanny, don't scrimp on the nanny.

VELSHI: Right. One of our who guys works here with us in the studio, he said the one you have to take care of is your mailman. He knows everything about you. He controls your life. That's the guy you have to take care of. Or the woman you've got to take care of.

KRAJCHIR: Right, exactly. So the interesting thing about the postal worker is it's actually illegal to tip your postal worker more than $20. In the amount that it's worth. You're not supposed to tip them cash at all, so you've got to think baked goods, maybe a manicure, a pedicure, a little foot massage since they walk around.

VELSHI: For your mailman? That's interesting. I hadn't thought about that. My mailman, I see him every day. I suspect he'd pound me in the head if I gave him a manicure gift certificate. But that's OK. Just saying.

KRAJCHIR: At the end of the day, really it's just something thoughtful, even a card that say thanks so much, I really appreciate you. Just something nice.

ROMANS: All right. The newspaper carrier, another one that is popular, the people always worried about giving to kids. A kid doesn't deliver my newspapers. It's like a corporate machine that delivers my newspapers. I'm not tipping that guy.

KRAJCHIR: You know, there's situations with all the technology, they've kind of cut out the old school newspaper boys. So I think in all honesty that's not a big tipping situation come holiday, unless you're maybe in a smaller town and community.

VELSHI: But it goes back to what you said. They are part of your team. If you know this person or this kid or whoever it is that delivers your paper and he delivers it to the right place and it's dry and all that, I guess that's probably a better guideline. If these people are important to you, then that might be a guide.

KRAJCHIR: Exactly. Right. So I mean, a $10 tip or something small and nice is fine. But again like you said, it's pretty automated these days.

ROMANS: Some of this is regional. You have doorman in buildings in cities and in smaller towns you don't have some of this tipping. I'm from Iowa where I didn't tip anybody until I moved to Chicago and I moved to this building ... VELSHI: You had a rough first year because you didn't tip anybody?

ROMANS: I couldn't figure out why nobody was opening the door, helping me with my package. I didn't know I was supposed to.

But I want to talk about teachers. Because everybody in the country, if you have a kid, has a teacher. Some places it's just not appropriate to give an expensive gift to a teacher. In other places, all the moms and dads team up and they buy one gift. What should you do, gauge kind of what your community does?

KRAJCHIR: I think in terms of a teacher, it's very competitive. Some regions are very competitive, there's waiting lists and all that stuff. So I think with teachers, I think keep it simple. Obviously your kid has friends at school. Why don't you get together with those friends and mommies and maybe get her something that she really appreciate. For example, a message, something that pampers her, maybe a nice gift certificate to an area restaurant.

ROMANS: Really expensive earplugs.

KRAJCHIR: Right.

ROMANS: And a bottle of wine.

KRAJCHIR: Something that helps her tune out and think about herself. Something really nice. And I think ganging up together with other parents is a nice gesture and keeps it simple for all of you.

VELSHI: Stacey, good to talk to you, thank you for these good tips.

KRAJCHIR: Thank you so much. Have a good holiday.

ROMANS: "The Itty Bitty Guide to Tipping."

VELSHI: Well, holidays like Thanksgiving are typically days that are spent with friends and family. Would you ever spend it talking on the phone with complete strangers?

ROMANS: Well, every year, there are a select few who do.

(BEGIN VIDEOTAPE)

VELSHI (voice-over): It's the holidays and you forgot to defrost the turkey in advance. Who can you turn to for help? Meet retired food writer Dorothy Jones.

VELSHI: One of 55 turkey gurus working at Butterball's hotline in a Chicago suburb.

JONES: I'm a home economist and therefore, I'm a turkey expert, having gone through training all these many years. I love being on the Butterball Turkey Talk Line helping people. It's a very gratifying job.

VELSHI: It started back in 1985 with a help wanted ad she spotted.

JONES: I did see this little paragraph about the need for people to work on the Butterball Turkey Talk Line. Having been a food editor, it was -- seemed like a natural thing to transition to.

VELSHI: Dorothy spent 10 years writing features for Chicago area newspapers before taking time off to raise a family. Once her children were older, she decided to take on a part-time job and she's been solving the nation's turkey crisis ever since.

JONES: We switch on the lights on November 1st and we go now all the way through the end of the week after Christmas. You're trying to help as many people as you can in the country. And people do call back the day after and for a couple of days just to tell, you know, this is the best advice I ever got. I don't know, in this period of time, November, December, if you -- any other place you can get that gratification.

(END VIDEOTAPE)

VELSHI (on camera): All right. Coming up, never get another unwanted catalogue in the mail again. Stay tuned to find out how.

(COMMERCIAL BREAK)

ROMANS: So I bought these really fancy pans, right? From a cooking Web site. Within two weeks, I had 20 ...

VELSHI: Let me guess. Every catalogue on the face of the planet.

ROMANS: Twenty kitchen and cooking catalogues. I didn't even know there were that many specialty catalogs for cooking and kitchen. I am inundated. My mailman can't eat shut the mailbox.

VELSHI: I have the same problem. I walk in and my guy gives me a pile of mail and it's all catalogues. The other day I spent more than an hour with all my catalogues, phoning up each one, the 1-800 number and getting myself removed from the list. It is ridiculous.

ROMANS: You can even call some retailers now and they will say if you like to remove your name from the list, please press one. Now we have something for you, cataloguechoice.org.

VELSHI: This is probably the best Web site that I've heard of in months.

ROMANS: This is actually, some environmental groups have put this together because they think these catalogues are wasteful, unnecessary, ink, trees. VELSHI: You need like five so you have bathroom reading, but fundamentally, this is all online. You don't need -- It's just wasteful to have all of these catalogues.

ROMANS: And some of them you never even ordered from them. So you can go to this Web site and you can save the planet and save your mailman or mailperson or mail carrier, I guess is the politically correct ...

VELSHI: What is it? Cataloguechoice.org?

ROMANS: Cataloguechoice.org and it will take you off of a thousand catalogue lists so you don't have to sit home and dial all those numbers.

VELSHI: What a waste of time getting myself taken off. I like these companies, I just don't need that kind of waste. It comes to my place, clogs up my mailbox. I put out the garbage.

ROMANS: I think - this is unscientific, I have no idea if this is true, but I think online shopping makes it worse because they sell your name to all these people and you get a bunch of kitchen catalogs ...

VELSHI: Can you tell we're steamed about this?

ROMANS: We are very steamed.

VELSHI: Thank you for joining us for this edition of YOUR MONEY. You can catch Christine on LOU DOBBS TONIGHT every weekday at 7:00 p.m. Eastern.

ROMANS: And you can see Ali every weekday morning on AMERICAN MORNING. We'll see you back here next week.

VELSHI: Saturday at 1:00 and Sunday at 3:00. See you then.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxant.com